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Technology Stocks : EMC How high can it go?
EMC 29.050.0%Sep 15 5:00 PM EST
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To: DBrian who wrote (13317)10/15/2001 2:47:33 AM
From: Gus  Read Replies (2) of 17183
 
Doubt it. Good win for IBM, but who is IBM fooling? 12 mainframes and 20 Sharks account for 50 terabytes or an average of ONLY 2.5 terabytes per Shark. Wal-Mart has more than 4,000 stores so if you take this press release at face value, 20 Sharks containing 50 terabytes support an average of ONLY 12.5 GB of data per Wal-Mart city-within-a-store. Does this sound credible? Of course not. It sounds more like IBM won a large supply chain contract (based on a mainframe SAN) that may have displaced older EMC systems and mainframes, but not the newer EMC or Hitachi systems at Wal-Mart. With disk drive capacity doubling every year and prices decreasing at 30%-50% a year, this type of replacement sales strategy has become more common.

Aside from regular briefings to the trades for the last two years, one more confirmation of IBM's scorched earth price strategy against EMC can be gleaned from the Shark revenue growth rate that IBM is willing to release:

       Shark     

1Q00     ?
2Q00    30%
3Q00    50%
4Q00    19%

1Q01    60%
2Q01    35%

The market numbers from IDC and Gartner already show that IBM did not gain much market share last year yet IBM is claiming that it has tripled its unit shipments of Shark this year after a rushed introduction in late 1999. Now, tripled unit shipments would yield higher revenue growth rate than 60% and 35% if not for the fact that IBM has proclaimed several times that the storage shall not be separated from the server and that it is willing to price Shark at up to 90% discounted list to prove it.

Naw, it appears to me that Big Blue is just trying to kick EMC while it is down. I'm sure that EMC is going to return the favor soon. All is fair in war and storage.
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